An invoice factoring company provides working capital commercial financing by making advances on accounts receivable. An invoice is defined as a product and/or service that has been accepted by a creditworthy commercial customer.
Here are some examples of potential invoice factoring scenarios;
– A growth businesses with constant fluctuations in receivable balances
– A business that is having a tough time keeping up with IRS 941 tax payments
– Service companies working for large creditworthy customers
– A business that is hiring staff on a new project and needs capital to meet payroll
– Corporations looking for capital without loss of shareholder equity
– A light manufacturing company placing continuous orders with a supplier
Examples where factoring would not be a fit;
– Brand new start-ups who have a upcoming contract but need up-front money to get it going will not qualify until they actually produce an invoice
– Situations related to real estate property are usually unavailable for factoring.
– Factors cannot provide up-front capital to open a restaurant.
– Factors do not cash out annual contracts (money today for funds that will be collected over the next year)
– Factoring is not for any type of retail store that sells to everyday public consumers.